We have already looked at ten of the most commonly overlooked tax deductions in Part I and Part II; here are five additional deductions you may qualify for:
Tax Free Social Security Benefits: Believing that social security payments are taxable is a common mistake made by many elderly taxpayers. They can be subject to taxes, but only when you fall into a mid to higher income bracket. The majority of social security recipients will not owe any taxes on the payouts they received.
Education Tax Credits: The American Opportunity Tax Credit and the Lifetime Learning Credit are available for qualified taxpayers that paid expenses for higher education during the past year. The IRS only allows you to take one or the other and not both, so choose the credit that is most beneficial for you.
Travel Expenses for Military Reserves: If you are a reservist with one of the military branches or a member of the National Guard, you may be eligible to deduct the cost of travel to meetings and drills. Travel must be at least 100 miles from your home to qualify. Deductible expenses include mileage (56.5 cents per mile for 2013), lodging, and half the cost of meals.
Medical Expenses: Self-employed taxpayers may deduct 100% of their health insurance premiums if they cannot be covered by a spouse’s plan at work. In addition, all taxpayers may be eligible to deduct certain miscellaneous medical costs such as travel expenses to and from a medical treatment.
Earned Income Tax Credit: If you are a low to middle income earner, you may qualify for a refundable tax credit of up to $6044. This means that even if you did not owe or pay in any taxes during 2013, you may still qualify for this credit. Some lower income earners do not file tax returns because they did not pay in anything and mistakenly believe they do not have a refund coming back to them. However, if you fail to file a return, you may be missing out on thousands of dollars that is owed to you. The good news is that you are allowed to claim your EITC refund for up to three previous tax years, so speak with a tax professional if you believe you may qualify.